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3 Companies With the Same Wonderful Problem

Customers clamor for more of their products or services than they can churn out.

What company doesn't dream of its customers snatching up every widget they can churn out, and clamoring for more? Having demand exceed supply is a good "problem" for businesses to have -- assuming they can eventually meet that demand before competitors permanently steal their customers.

Germany-based voxeljet (yes, small "v") is the latest entrant into the ranks of the publicly traded additive manufacturing – aka 3-D printing – companies. Its stock price soared more than 100% on the day of its October IPO, and continued to go ballistic -- until it suddenly plunged over the last two days.

Voxeljet produces high-speed, large-format 3-D printers -- which can print in various plastics and sands -- and provides on-demand parts production services to commercial and industrial customers. It reported strong third-quarter results in its first public earnings report last Thursday. Revenue increased 77% to $4.76 million, and the company returned to profitability after a blip earlier this year, reporting net income of $285,600 vs. a loss of $85,270 from the year-ago period.

The company's been capacity-constrained for a while on its services side; it currently operates out of just one facility in Germany. Not surprisingly, its services' revenue growth was accordingly tepid – just 12% -- in the quarter. Voxeljet will gain additional capacity in December, and has plans to further beef up capacity in the second quarter of 2014.

While voxeljet has some strong potential competitive advantages, the valuation remains crazy-high, even when compared to other momentum stocks such as the other 3-D printer makers and Tesla. If we annualized its quarterly earnings per American depository share, or ADS, of $0.018, its P/E, as of Wednesday's close, would still be about 545 -- down from more than 800 before its big two-day drop.

Potential investors shouldn't dive in yet. Wait at least one quarter to see if the company's promise of growth seems to be on track, and for the stock's valuation to come further down to Earth.

Hain Celestial is a leading producer of organic and natural foods, beverages, and personal care products. Some of the better-known brands in its diverse 30-plus brand portfolio are Celestial Seasonings (herbal and other teas), Greek Gods (Greek yogurt), and MaraNatha (almond and other nut and seed butters).

Despite the plant that produces the MaraNatha butters running around the clock, the company can't keep up with consumers' intense hunger for the products. MaraNatha sales increased more than 20% in the quarter, though growth could have been 30%-plus if the company was able to fill its out-of-stocks, according to John Carroll, who heads Hain's U.S. segment.

Customers are also snatching up all the Arrowhead Mills whole grains and DeBoles pasta Hain can churn out. Naturally, Hain's exploring adding more production capacity.

Additionally, the company is finding it challenging to get its hands on enough almonds and chia seeds for its butters. Hain's size should help with the supply issues, as it provides it with bargaining power smaller companies don't have.

As one might expect from a company whose customers are craving more, Hain's been satisfying its shareholders' hunger for profits. It once again beat analysts' estimates when it reported quarterly earnings, for the period ending Sept. 30, with revenue rising 33% to $477.5 million, and adjusted earnings per share increasing 27%.

U.S. consumers might not recognize the name because the company sells it products in the U.S. through contracting supply businesses, rather than directly to consumers. Since entering the Chinese market in 1995, however, A.O. Smith's been selling directly to consumers via its own stores and independent retailers. The company enjoys a strong brand name among Chinese consumers, thanks to its focus on quality and considerable advertising spending.

In its most recent quarter, the company's China sales rose 35%, and accounted for 27% of total revenue, while overall sales were up 16%. Both market-share gains and an expanding overall market are driving the company's torrid growth in China.

To keep up with demand, A.O. Smith recently opened its second water heater plant in China, which will boost its capacity by 50% once it's running at full speed.

It's just too soon to predict that demand for voxeljet's services should remain strong. Furthermore, the stock is overvalued, as Blake Bos, The Motley Fool's industrial analyst, just cautioned, and as I warned just after the IPO.

But A.O. Smith and Hain Celestial both look attractive. Strong demand for their products shouldn't let up anytime soon -- and more importantly, they're both reasonably valued.